Skipton loans benefit from rate cut

16 August 2005

Skipton building society has announced a reduction in its standard variable rate (SVR), which will take effect from September 1st.

The building society has dropped its SVR by 0.20 per cent, following the Bank of England's recent interest rates cut, to 5.89 per cent.

This move is expected to impact upon 35 per cent of Skipton's borrowers.

John Goodfellow, chief executive of Skipton, explained the reasons behind the cut, stating: "In an environment of falling interest rates, it becomes increasingly important to protect savers - of which we have six times more than borrowers - whilst remaining fair to all of our members.

"Unlike a number of other institutions, which cut rates at a time when the Bank of England’s base rate remained stable and are taking a second bite at the cherry in response to last week’s MPC announcement, I believe Skipton has taken the path of fairness, delivering a balanced response to the recent interest rate changes."

Most lenders have passed on the full quarter-point interest rates cut to the borrowers, taking the average SVR down to 6.5 per cent from 6.75 per cent.